Cable is seen trading on a defensive stance and below the 1.3050 level for the time being, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we held the view that GBP ‘could continue to trade in a choppy manner, likely between 1.2900 and 1.3020’. The sudden decrease in volatility came as a surprise as GBP traded in a quiet manner and within a relatively narrow range (between 1.2911 and 1.2979). The price action offers no fresh clues and for today, GBP is likely to trade sideways, expected to be within a 1.2910/1.3010 range.”
Next 1-3 weeks: “Last Friday (16 Oct, spot at 1.2905), we held the view that GBP ‘is likely to trade on a slightly defensive mode with 1.3050 acting as a strong resistance’. GBP rose to a high of 1.3024 yesterday (19 Oct) and while downward pressure has eased, only a break of 1.3050 would indicate that GBP is not ready to test the major support at 1.2845. In other words, there is no change in our view for now. That said, in order to rejuvenate the current flagging momentum, GBP has to move and stay below 1.2900 within these 1 to 2 days or the odds for a test of 1.2845 would diminish quickly.”
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